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Tuesday, 11 February 2020

Central Bank of Egypt waives EGP 48.5 bn-worth of debt, interest payments for factories

The Central Bank of Egypt (CBE) has waived EGP 48.5 bn-worth of debt and interest payments for struggling factories and companies as part of its ongoing debt relief initiative, Al Shorouk reports, citing a recent announcement. Meetings between a committee with members from the CBE and the Egyptian Federation of Investors Associations and businesses over the past few weeks saw agreements with 176 companies no longer obliged to pay EGP 15.9 bn in accrued interest to banks. Lawsuits filed by banks against 91 companies in default will be set aside.

In related news: A total of 141 businesses have applied for the CBE’s EGP 100 bn initiative to support local industry, CBE Deputy Governor Gamal Negm told the House Industry Committee, according to the local press. The CBE has doled out some EGP 18.3 bn-worth of loans to 80 factories and has forgiven or rescheduled 182 factories’ debt, Negm said.

Background: The CBE launched its local industry initiative in December to exempt nearly 5.2k factories from accrued interest payments through one branch of the two pronged approach and have their names removed from a blacklist maintained by the central bank. The initiative also targeted boosting medium sized domestic manufacturing through subsidized loans at a declining 10% interest rate. The CBE also issued a decision last week to halt legal action against struggling factories unable to pay off their debts.

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